Suppose you take out a 30 year mortgage for $ 250000 at 4% interest. The monthly payments on this loan are $ 1193.54. If you pay an extra 40% per month on your mortgage, how soon will you pay off the loan? How much will you save in interest by making the extra payments? If you put $ 1193.54 per month into an annuity earning 7.25% interest compounded monthly for the remaining time on your original loan, how much money will you have at the end of the original 30 years?
Suppose you take out a 30 year mortgage for $ 250000 at 4% interest. The monthly payments on this loan are $ 1193.54. If you pay an extra 40% per month on your mortgage, how soon will you pay off the loan? How much will you save in interest by making the extra payments? If you put $ 1193.54 per month into an annuity earning 7.25% interest compounded monthly for the remaining time on your original loan, how much money will you have at the end of the original 30 years?
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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Suppose you take out a 30 year mortgage for $ 250000 at 4% interest. The monthly payments on this loan are $ 1193.54.
If you pay an extra 40% per month on your mortgage, how soon will you pay off the loan?
How much will you save in interest by making the extra payments?
If you put $ 1193.54 per month into an
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